KRON sells Van Ness building - housing coming

KRON sells Van Ness site for $26 million

Updated 7:40 am, Tuesday, May 13, 2014

The Van Ness Avenue building that TV station KRON has long occupied is set to become housing after the media company decided to cash in on rising real estate values in the neighborhood.

A joint venture between South Beach Partners and Oryx Partners paid about $26 million for 1001 Van Ness, a 106,777-square-foot property at O'Farrell Street that has served as KRON's offices since 1967.

The developer plans to demolish the building and construct a mid-rise complex with about 200 housing units, according to Juan Carlos Wallace, a partner with Oryx Partners. Wallace said his group was attracted to the site's location near the $2 billion California Pacific Medical Center under construction a block away.

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Also, he said it's unusual to find large, developable parcels in an established neighborhood like Cathedral Hill, walking distance from cultural institutions like the Symphony, Opera and SFJazz.

"We intend to design and build a signature project that stands the test of time," Wallace said. "It's a pretty significant intersection."

The sale comes nearly three years after KRON briefly brought the property to market but decided not to sell. Brian Greif, KRON's general manager at the time, said the media company had more space than it needed.

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After testing the market, KRON decided to find a new home before turning its attention to selling the building. It reached a sublease deal with KGO at 900 Front St., the northern waterfront neighborhood that is home to several television stations.

The wait turned out to be fortuitous: The sale price was nearly double what KRON originally expected to get for the property.

The KRON staff will move to the new building in the fourth quarter of this year, according to Lou Anne Nabhan, vice president of corporate communications for Media General, which took over ownership of the station last year after a merger with Young Broadcasting.

While Young Broadcasting filed for Chapter 11 bankruptcy protection in 2009, Nabhan said the station is on firm financial footing.

"KRON is going very well," she said. "They have a strong local following. They produce more than 55 hours of local news each week, which is a huge amount of news by any standard for a local TV station."

Oryx Partners, a development startup founded by three Bay Area real estate veterans, is also building a 40-unit project at 230-234 Seventh St.

The 90,000-square-foot Van Ness building was designed by Gardner Daily, who also was the architect for The Chronicle building at Fifth and Mission streets. Young Broadcasting bought the four-story structure in 2000 for $8.4 million.

The sale comes as a number of Van Ness property owners seek to take advantage of demand for housing and medical office space, which will likely be very strong after the new CPMC hospital opens.